U.S. Supreme Court Grants Stay of CTA Injunction ***Updated*** FinCen Says BOI Reports are Voluntary for now
By Richard S. Ekimoto, Esq.
Today, the U.S. Supreme Court issued a stay of the injunction prohibiting the enforcement of the CTA pending the disposition of the appeal before the 5th Circuit Court of Appeals and any further proceedings in the U.S. Supreme Court, if any. The decision was apparently a 8-1 decision with Justice Gorsuch concurring and Justice Jackson dissenting. The stay means that reporting companies without an exemption will need to file a BOI Report with FinCen. Although FinCen has not issued any guidance, it is anticipated that they will provide a period of time for reporting companies to file their BOI Report. The last time, the injunction was stayed, FinCen provided three weeks for reporting companies to file a BOI Report.
As a result, incorporated associations without an exemption should proceed to file their BOI Report as soon as possible. Unincorporated associations should consult with their legal counsel whether they are required to file a BOI Report. Board members that do not wish to provide their association with their Beneficial Owner Information can submit their information directly to FinCen on its website and provide their FinCen ID Number to their association for the association’s BOI Report.
January 23, 2025 10:20 a.m. HST Update: The link to the U.S. Supreme Court order is added above. At the time of the original post, only a summary of the order was available on the U.S. Supreme Court website. Having now read the formal order, we can provide additional information about the dissent and concurrence. Justice Gorsuch concurred with the order but said that he would have granted the U.S. Government’s request for the U.S. Supreme Court to immediately address whether the U.S. District Court in Texas had that authority to issue a universal injunction (rather than one only for the benefit of the plaintiffs in the case). Justice Jackson dissented, stating, “However likely the Government’s success on the merits may be, in my view, emergency relief is not appropriate because the [Government] has failed to demonstrate sufficient exigency to justify our intervention.” Justice Jackson’s reasoning was that the 5th Circuit Court expedited its appeal of the case and FinCen had delayed the implementation of the CTA by almost four years after Congress enacted the law.
January 24, 2025 Update: FinCen updated their website to address the U.S. Supreme Court order and has stated that filing BOI Reports by reporting companies remains voluntary. It states in part:
As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
Since the U.S. Supreme Court has already ruled on the identical question about whether a stay is appropriate, we anticipate that the separate Smith order will also be stayed eventually or possibly withdrawn. Incorporated associations without an exemption should probably take this time to voluntarily file its BOI Report since it is unclear how long FinCen will provide reporting companies to file BOI Reports after the Smith order is stayed or withdrawn. Unincorporated associations should confer with their attorneys.